You are here

Cyprus - perspective intellectual property holding jurisdiction

2014-10-07 16:30

Publications

Cyprus is considered as a perspective intellectual property holding jurisdiction in regards to the introduction of the new Cyprus tax legislation on Roaylties in May 2012.

The new favourable IP regime reduces taxes on incomes of the Cyprus IP Holding Company as of the owner of the IP rights. Such tools as the access to Double Tax Treaty network, EU Directives, as well as a huge variety of tax benefits enable Cyprus to become a leading jurisdiction for IP investments. Cyprus IP legislation defines all types of intellectual property such as patents, copyrights, software copyrights, trademark/service marks, business know-how, any rights related to scientific, literary, artistic or commercial work which qualify for the favourable tax regime. The main advantages offered by Cyprus favourable tax regime include efficient tax system with no withholding tax on dividend payments irrespective of the country of residence of the recipient, no withholding tax applicable on the payment of royalties from Cyprus as well as possibility to claim capital expenditure for the acquisition or development of IP as a tax deduction in the year, effective tax rate of 2.5% or even less, 80% exemption on worldwide royalty income generated from an IP owned by Cyprus resident companies. Investing through a Cyprus IP Holding Company brings favourable opportunities for investors who are seeking to minimize the taxation paid from profits related to IP holding.

So, in accordance what was mentioned, Cyprus IP holding company offers a competitive advantage in terms of tax planning. Nevertheless, it is important to highlight that every business structure needs careful consideration in order to establish a successful and efficient regime. Proper advice should be sought from experiences professionals in this regards.